The Island Hotels Group has reported an operating profit of €3.3 million in 2013 up from the operating profit of €2.09 million in the previous year.

Ebita in 2013 was €6.5 million compared to €5.4 million last year. Net profit for the year was €554,000 compared to a loss of €989,272 in 2012.

The group said the turnaround was achieved in international market conditions which remain challenging. Tourist arrivals in Malta were better than expected in 2013 and these led to marginal increases in hotel occupancy levels.

Increases in hotel occupancy however did not mirror the increase in arrivals due to higher percentages of tourists using non-hotel accommodation. Hotel income improved and this, together with an internal drive on cost efficiencies, translated to better operating margins. Sales of vacation ownership were at similar levels to  the previous year. The focus in relation to vacation ownership during the year was on margins and cost efficiencies  which did not have a negative effect on sales volumes.

These enhanced operating results in both the hotel side of the business and in vacation ownership, were the main contributors to a €1.2 million turnaround in the pre-tax result  from last year’s negative €834,156. The group maintained its market leading position in event catering and investment in this side of the business continued with further openings of Costa Coffee outlets.

The effect of this growth area on group profits is expected to be felt when the initial investments take their full effect, the group said.

The board of directors is not recommending the payment of a dividend for the year ended 31 October 2013.

The group said it is planning to a new bond on the local market.